A. INFLATION RATES FOR ALL ITEMS
The December 2023 headline inflation in BARMM accelerated at 6.2 percent from 5.9 percent in November 2023. Inflation in December 2022 was higher at 6.3 percent. Table 1 shows that in December 2023, Maguindanao had the highest inflation rate among BARMM provinces, including its Highly Urbanized City (HUC), with 11.0 percent from 9.5 percent in November 2023. Other provinces that posted a higher movement of prices in December 2023 was Tawi-Tawi with 8.9 percent. On the other hand, province/city with lower inflation rates compared to previous month were Basilan at 5.5 percent, Lanao del Sur at 3.2 percent and Cotabato City also posted a slower inflation rate with 2.9 percent from 4.8% in November 2023. Meanwhile, the province of Sulu remains the same as its November 2023 rate at 0.9 percent inflation.
The following commodity groups exhibited higher inflation rates from their previous month’s rates:
a. Food and Non-Alcoholic Beverages, 7.2 percent
b. Alcoholic Beverages and Tobacco, 8.6 percent;
c. Clothing and Footwear, 3.4 percent;
d. Transport, 7.4 percent;
e. Information and Communication, 0.7 percent;
Meanwhile, the commodity groups that posted decreases from their previous month’s inflation rates were the following:
a. Housing, Water, Electricity, Gas and Other Fuels, 1.8 percent;
b. Recreation, Sport and Culture, 6.8 percent;
c. Restaurants and Accommodation Services, 9.5 percent.
On the other hand, the following commodities remain the same as their November 2023 rates:
a. Furnishings, Household Equipment and Routine Household Maintenance, 2.2 percent;
b. Health, 0.8 percent
c. Education Services, 7.5 percent; and
d. Financial Services, 0.0 percent.
e. Personal Care, and Miscellaneous Goods and Services, 4.1 percent.
B. INFLATION RATES FOR FOOD ITEMS
For food commodities, inflation increased to 7.5 percent in December 2023, from 7.0 percent in the previous month. In December 2022, inflation of food items was higher at 8.6 percent.
The increase in the region’s food inflation was mainly brought about by the higher annual indices for Fish and other seafood (ND) at 0.7 percent; Cereals and cereal products (ND) at 14.3 percent, Cereals (ND) 21.2 percent, and Rice at 21.6 percent, (see Table 3). Also contributing to the uptrend in the overall inflation during the period were the higher annual increments in the indices of the following food commodity groups as compared with their previous month’s inflation rates:
a. Meat and other parts of slaughtered land animals, 6.9 percent;
b. Oils and Fats, negative 0.6 percent;
On the other hand, the following food groups posted deceleration from their previous month’s inflation rates. These were:
a. Corn, negative 4.8 percent;
b. Milk, other dairy products and eggs, 6.6 percent;
c. Fruits and Nuts, negative 3.5 percent; and
d. Vegetables, tubers, plantains, cooking bananas, and pulses, 6.2 percent; and
e. Sugar, Confectionery and Desserts, negative 0.4 percent.
f. Ready-made food and other food products n.e.c,, 1.1 percent
On the other hand, the food commodity group remain the same as its November 2023 rates, was:
a. Flour, Bread and Other Bakery Products, Pasta Products, and Other Cereals, 2.9 percent.
C. PURCHASING POWER OF PESO
Purchasing Power of Peso (PPP) is inversely related to inflation rate. Thus, as the inflation rate increases, PPP declines, as shown in Figure 2. In BARMM, PPP is at PhP 0.80 as of December 2023.
TECHNICAL NOTES:
Consumer Price Index (CPI)
The CPI is an indicator of the changes in the average retail prices of a fixed basket of goods and services commonly purchased by households relative to a base year.
Uses of CPI
The CPI is most widely used in the calculation of the inflation rate and purchasing power of peso. It is a major statistical series used for economic analysis and as a monitoring indicator of government economic policy.
Computation of CPI
The computation of the CPI involves consideration of the following important points:
a. Base Period
The reference date or base period is the benchmark or reference date or period at which the index is taken as equal to 100.
b. Market Basket
A sample of the thousands of varieties of goods purchased for consumption and services availed by the households in the country selected to represent the composite price behavior of all goods and services purchased by consumers.
c. Weighting System
The weighting pattern uses the expenditures on various consumer items purchased by households as a proportion to total expenditure.
d. Formula
The formula used in computing the CPI is the weighted arithmetic mean of price relatives, the Laspeyre’s formula with a fixed base year period (2018) weights.
e. Geographic Coverage
CPI values are computed at the national, regional, and provincial levels, and for selected cities.
Inflation Rate
the rate of change of the CPI expressed in percent. Inflation is interpreted in terms of declining purchasing power of peso.
Headline Inflation
refers to the rate of change in the CPI, a measure of the average standard “basket” of goods and services consumed by a typical family.
Purchasing Power of Peso
shows how much the peso in the base period is worth in the current period. It is computed as the reciprocal of the CPI for the period under review multiplied by 100.
Note: The dataset used in the special release is exclusive for BARMM provinces including Cotabato City and excluding 63 barangays.
ENGR. AKAN G. TULA
OIC-Regional Director
